School of Economics and Finance

No. 455: An Econometric Investigation into the Macroeconomic Relationship between Investment and Saving: Evidence from the EU Region

Constantinos Alexiou ,

March 1, 2002

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By and large, it is beyond any question that sound government finances may indeed be an important factor that conditions economic progress. Nonetheless, the notion that saving must be boosted in order to expand investment, is a contention that has to be taken with a 'pinch of salt'. This study by elaborating on the temporal relationship between investment and saving, provides econometric evidence, on the basis of which investment is a variable with the utmost importance.

J.E.L classification codes: E12, E20

Keywords:Investment, Saving, EU